Connect with us


Phuket Finance: Avoid offshore workers’ retirement-plan pitfalls

Legacy Phuket Gazette



PHUKET: Thailand hosts a sizable population of offshore oil workers. They are unlike the majority of investment clients found here. Most clients are retired and their portfolios are being managed for income and capital preservation.

However, offshore oil workers have the advantage of being able to live in Thailand and also bring in a very nice income. In 1993, I was a project mechanical engineer for a US research base in Antarctica for a year. All food was provided and housing paid for. With nowhere to spend money, I saved 85% of my income.

The problem is that most offshore or contract workers make two very common mistakes. For one, most are not even thinking of retirement. Due to the dangers of their jobs, they have a live-in-the-moment attitude. While a great many earn over US$100,000 (over 3.3mn baht) per year, very few save much of it.

The second mistake that many make is buying unit-linked life assurance products. These products not only have upfront fees, but recurring fees every year; poor performance; and seven to 10-year lock-in periods. Anyone who is familiar with these products knows to run away as fast as they can.

What offshore oil workers should be focused on is saving their money in a low-cost discount brokerage account held in their own name only and reaping the benefits of compounded interest.

Considering how cheap it is to live in Thailand, let’s say the worker is able to save US$50,000 (about 1.65mn baht) a year for 10 years. The key is putting that money to work in a diversified portfolio exposed to the stock market, which, over time, appreciates in value. The goal is to be able to retire in just 10 years.

For the past 10 years, the Vanguard REIT ETF has achieved an annual return of 9.29%. This
return was achieved even with the real estate crash of 2008 and 2009. That’s why it’s important to invest for the long haul. Over a 10-year period, if the Vanguard REIT ETF was the only holding in a portfolio, and by investing US$50,000 a year, there would now be US$963,351 (more than 31mn baht) in the portfolio.

The best part about this program is that it’s only saving half a year’s salary. The rest can still be spent and enjoyed. The key is setting one up so that retirement within 10 years is realistic. With an actively-managed portfolio, there could be more than US$1mn in the portfolio.

Just look at shares of Facebook. Since July of last year, shares have gone from just above US$20 to almost US$80.

Or look at the NASDAQ stock market, which is up 27% in the past year.

So what happens when the 10 years is up and the worker is ready to retire? Do they have to stop spending money? No, not at all. The good news is that they are used to living on US$50k a year in Thailand.

Once the 10 years is up, the portfolio is adjusted more conservatively and only a 5%
annual return is sought. This is just a little more than half of the 9% that the Vanguard REIT ETF
delivered in the past 10 years.

What is 5% on US$963,000? As might have been expected, it’s US$48,000.

At the end of 10 years, the worker has a roughly US$1mn nest egg, is retired and living on the same amount of money as when they were working offshore on the oil rig.

Don Freeman is president of Freeman Capital Management, an independent US Registered Investment Advisor. He has over 20 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email:

— Don Freeman


Get more from The Thaiger

📱 Download our app on Android or iOS
👋 Have your say on our Thailand forums
🔔 Subscribe to our daily email newsletter
📺 Subscribe / Join YouTube for daily shows
👍 Like/Follow us on Facebook
🐦 FOLLOW us on Twitter
📷 FOLLOW us on Instagram


Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Koh Samui1 hour ago

Surat Thani announces new Covid-19 measures for Samui Plus

Thailand4 hours ago

His Majesty the King donates 2.8 billion baht in Covid-19 aid

Coronavirus (Covid-19)5 hours ago

Covid UPDATE Provinces: 14,260 new infections, 119 deaths

Welcome back to Thailand!

Thaiger is getting behind local businesses for the restart of tourism in Thailand - up to 50% discounts across all advertising packages!

Coronavirus (Covid-19)5 hours ago

Vaccination registration open for foreign residents over 60 in Bangkok

Coronavirus (Covid-19)7 hours ago

Autopsy results for woman who died after mixing vaccines

Coronavirus (Covid-19)11 hours ago

Covid UPDATE Saturday: 14,260 new infections, news briefs

Join the conversation on the Thaiger Talk forums today!
Thailand16 hours ago

Department head predicts Covid-19 could last up to another year

World18 hours ago

Swedish prison hostage situation resolved with pizza

Thailand19 hours ago

Minister: Foreigners, migrant workers are cared for amid Covid-19

Coronavirus (Covid-19)24 hours ago

“Withhold Intubation” for certain older Thammasat Hospital patients

Coronavirus (Covid-19)1 day ago

Bang Sue vaccination centre open for expats 60+, under must wait

Coronavirus News & Updates1 day ago

“Covid-19” deaths said to cause crematorium in Bangkok to partially collapse

Thailand1 day ago

Nakhon Sawan farmers make large profits growing fingerroot as Covid cure

Coronavirus (Covid-19)1 day ago

Leaked document: military arranging private Moderna vaccines

Thailand1 day ago

Nakhon Si Thammarat arrest drug suspect hiding in jar

Thailand5 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism5 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket5 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism5 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand5 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism5 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand6 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand6 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand6 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand6 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand6 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand6 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand6 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand6 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand7 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8